An International Monetary System refers to the set of rules and institutions that govern how countries exchange currencies and conduct international trade. It includes mechanisms for determining exchange rates, facilitating payments, and providing financial stability. Key components often involve central banks, international organizations like the International Monetary Fund (IMF), and agreements between nations. Historically, various systems have been used, such as the Gold Standard, where currencies were pegged to gold, and the current system of floating exchange rates. These systems aim to promote economic stability and growth by ensuring that countries can trade effectively and manage their currencies in a globalized economy.